Dictionary of Exit Planning Terms

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Merger

The combination of two or more companies in which the resulting firm maintains the identity of the acquiring company.

Middle-Market

Typically refers to businesses with sales ranging from $5 million $200 million.

Market Value

The actual price a willing buyer and seller actually agree to as payment for a company.

Mezzanine Financing

Mezzanine capital, in finance, refers to a subordinated debt or preferred equity instrument that represents a claim on a company's assets which is senior only to that of the common shares. Mezzanine financing can be structured either as debt (typically an unsecured and subordinated note) or preferred stock.

Mezzanine financing is often provided by private placements and typically require a higher return than on secured or other more senior debts.

Minority Discounts

Since minority shareholders do not have controlling interest, the values of their shares are less attractive than those who own controlling interest. The price of a share sold to a minority shareholder is often discounted from the calculated price per share for the entire company.